Google & Facebook Are Not Your Friends

With implementation of Europe’s General Data Protection Regulation just two weeks away, it is time to state a hard truth: Google and Facebook are not your friends. They seems friendly enough, of course. They give you a free ad server and a nice website analytics tool, and Facebook helps you see pictures of your friends’ vacations. But remember what it is costing you: your customer data.

Online value and marketing revenues are predicated on data. Your data is your lifeblood, yet the Google/Facebook duopoly take it from you in order to compete with you every day. Google and Facebook look different on the outside, but they both make money in essentially the same way. They gather data from vast swathes of the Internet and then use it to sell advertising. That sounds innocent enough until you recall that the websites from which they aggregate that data belong to you and me. Between them, the duopoly owns all of the top ten third-party data collectors across the web, meaning that the vast majority of web site visits are tracked by one or both of them, even though they do not own the sites, produce content for them or pay for the data they take.

What does this mean for you? Well, let’s look at the IAB’s new growth figures for media revenues. From 2016 to 2017, the entire US media industry – online, TV, print, games, etc. – grew by $13.3 Billion, which sounds like good news, right? Except, that total is made up of $13.4 Billion growth for Google and Facebook, and $0.1 Billion reduction for the rest of the entire media industry. The duopoly literally took all the growth last year.

Google and Facebook are not your friends.How does this affect affiliates and advertisers in particular?

Take a 50,000’ overview of what is happening right now and things become clearer. Both Google and Facebook are under threat by GDPR. If implemented in the spirit and letter of the law it directly undermines the duopoly’s business model by requiring that website visitors give specific consent for the use of their data, and only then by the “Data Controller” – generally the website owner (this is massively simplified – if you want to know more then doing a Search for “GDPR consent” will provide lots of food for thought). The idea that a visitor to a website is happy to grant permission for Facebook to vacuum up their data because the site happens to have a Facebook Like button on it is ridiculous, of course, but under GDPR working on that assumption actually becomes illegal.

The Duopoly are taking a number of steps to protect their interests, and in the process it is becoming clear that they are willing to sacrifice the interests of publishers and advertisers along the way – and really, why wouldn’t they? The basic approach so far seems to be to a) lean on publishers to sign away their data unless they want to stop using Google services, and b) to tell advertisers that they won’t get as much data before when running campaigns.

One big announcement from Google last week was that it will no longer let buyers use the DoubleClick ID when utilizing its data transfer service. The service allows marketers to pull data out of DoubleClick Campaign Manager (DCM) for cross-platform reporting and measurement. It means that media buyers will have much reduced visibility into user activity and the change cements Google’s position as the primary provider of ad server/analytics/DSP tools for most enterprises. The DoubleClick ID is the identifier that hangs Google’s entire ecosystem together, and nobody else has the scale or breadth of offerings to compete.

Google’s approach to this is indicative of how the duopoly are trying to leverage GDPR in their own interests, to use it as an excuse to take even more power away from advertisers and publishers. Over the next few weeks we will look at this in more detail but for now, as each day brings a new set of emails from Google and Facebook explaining how their terms have changed, publishers in particular find themselves in a bind. They have less than two weeks to set up their solution to GDPR and yet one of their primary software suppliers is suddenly moving the furniture around.

GDPR is a big deal. Take care of your interests and protect your data. Google and Facebook are not your friends.

About mThink

mThink is a specialist digital marketing company based in San Francisco. We focus on media buying, Facebook marketing, direct response, social and mobile. In addition mThink produces the annual Blue Book Rankings of major performance marketing networks.
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